Check that EMI scheme you didn’t ask for

Rucha Biju ChitrodiaMar 17, 2007, 12.30am IST

MUMBAI: It is a well-known fact that credit card companies offer an extended credit option. Here, a consumer repays a percentage of the credit at the end of the payment cycle (when he gets the card statement), and the rest in equated monthly instalments (EMI). This facility comes in especially handy for big-value purchases.

A consumer, though, recently faced a strange problem with such a service. The wife of financial advisor Gaurav Mashruwala paid for a bill at Bombay Hospital using her Citibank Indian Oil credit card. On receiving the card statement, Mashruwala was surprised to find that he had been billed only for 50% of the amount.

"When I called the bank to inform them about the discrepancy, I was told there wasn't any. The outstanding amount was arbitrarily converted into a loan of two instalments," says Mashruwala. Mashruwala's grouse is that he should have been informed about the scheme.

A Citibank spokesperson clarifies the offer was merely a deferred payment option for the customer, with zero interest and no charge whatsoever. "It is more of customer service. But there seems to be some clerical error (on the part of the hospital). Either they forgot to mention the option or used the wrong EMI machine for swiping the card."

This may be a one-off case, but customers will be better off inspecting their statements closely. They may just find themselves enrolled in an EMI scheme they did not ask for, even if it comes at no charge at all. A banking official categorically says, "If it is a scheme, it must be notified. The bank cannot perforce make one go in for schemes."

On its information policy, a Citibank statement says, "The customer is informed about these schemes through a variety of channels — telephone, mail, our website and at the point of sale. The latter is a unique product feature that Citibank has at select merchant establishments, allowing customers the convenience of paying in instalments, at no extra charge to the customer, for large-ticket purchases."

All the public sector banks The Times of India spoke to specify that customers are informed about the EMI option when they apply for the card itself. While some banks say they do not charge interest on special EMI schemes with merchant establishments, regular EMI schemes come at an interest of up to 2% a month, depending on the bank and its policies.

The Citibank statement says that in the rare case where a customer gets mistakenly enrolled into an EMI scheme, all he needs to do is call the bank's 24-hour helpline and ask for a reversal. "Our customer service officers will get the reversals done on the phone itself."

A Reserve Bank of India official advises that in case of grievance consumers' first contact should be the bank itself. If the bank does not respond within a month, they can approach a banking ombudsman.